CPA FAR Most Tested Topics: What to Focus Your Study Time On
Discover the most heavily tested topics on the CPA FAR section. Prioritize your study plan with data-driven insights on revenue recognition, leases, government accounting, and more.
Where the FAR Exam Focuses Its Questions
Financial Accounting and Reporting is widely considered the most content-heavy section of the CPA exam. With so much material to cover, knowing which topics appear most frequently can make the difference between passing and failing. The AICPA Blueprint provides allocation ranges for each content area, but real candidate experience and exam analytics reveal even more about where you should concentrate your efforts.
This guide breaks down the most heavily tested FAR topics based on the current CPA exam blueprint, candidate feedback, and historical exam trends. Use it to build a study plan that maximizes your score per hour of preparation.
Top Tier: The Topics You Cannot Skip
Revenue Recognition (ASC 606)
Revenue recognition under ASC 606 is consistently one of the most tested topics on FAR. The five-step model appears in multiple-choice questions, task-based simulations, and even document review simulations. You need to master identifying performance obligations, determining the transaction price, allocating the price to obligations, and recognizing revenue over time versus at a point in time. Contract modifications, variable consideration constraints, and principal-versus-agent determinations are all fair game.
Leases (ASC 842)
The lease standard receives heavy testing because it changed so fundamentally from legacy guidance. Both lessee and lessor accounting are tested, but lessee accounting dominates. You should be able to classify leases as operating or finance, calculate right-of-use assets and lease liabilities, handle lease modifications, and understand sale-leaseback transactions. Short-term lease exceptions and variable lease payments also appear regularly.
Government and Nonprofit Accounting
State and local government accounting consistently represents 15 to 25 percent of FAR content. Fund accounting, government-wide financial statements, modified accrual versus full accrual basis, and GASB standards are all heavily tested. Nonprofit accounting under ASC 958, including contributions received and made, net asset classifications, and financial statement presentation, also appears frequently.
Second Tier: High-Frequency Topics
Financial Statement Presentation and Disclosures
Balance sheet classification, income statement presentation, and comprehensive income are tested in nearly every exam. You should know the difference between current and noncurrent classifications, understand discontinued operations criteria, and be comfortable with other comprehensive income components including unrealized gains and losses on available-for-sale securities, pension adjustments, and foreign currency translation.
Equity Transactions
Stock issuances, treasury stock transactions, stock dividends versus stock splits, and retained earnings adjustments appear regularly. Convertible instruments and stock compensation under ASC 718 are increasingly common. Make sure you can calculate basic and diluted earnings per share, including the treasury stock method for options and the if-converted method for convertible securities.
Business Combinations and Consolidations
Acquisition method accounting under ASC 805 is a staple of FAR testing. You need to know how to measure consideration transferred, identify and measure acquired assets and assumed liabilities at fair value, calculate goodwill, and handle bargain purchases. Consolidation procedures, including intercompany eliminations and noncontrolling interests, frequently appear in simulations.
Bonds and Long-Term Debt
Bond issuance at par, premium, and discount continues to be tested consistently. Effective interest method amortization, bond retirement, and debt modification versus extinguishment are common topics. Convertible bonds and bonds issued with warrants also appear with moderate frequency.
Third Tier: Regular but Less Dominant
Income Taxes (ASC 740)
Deferred tax assets and liabilities, temporary versus permanent differences, valuation allowances, and uncertain tax positions all appear on FAR. The conceptual framework for recognizing and measuring deferred taxes is tested more frequently than complex multi-jurisdictional calculations.
Pensions and Other Postretirement Benefits
Defined benefit pension accounting remains a tested topic despite its complexity. Focus on the components of net periodic pension cost, projected benefit obligation calculations, and the corridor approach for amortizing gains and losses. Defined contribution plans receive lighter testing.
Inventory and Cost of Goods Sold
FIFO, LIFO, weighted average, and specific identification methods are tested, along with lower of cost or net realizable value adjustments. LIFO reserve and LIFO liquidation effects also appear. Dollar-value LIFO calculations show up in simulations occasionally.
Study Strategy Based on Testing Frequency
Allocate Time Proportionally
Spend approximately 40 percent of your FAR study time on top-tier topics, 35 percent on second-tier topics, and 25 percent on third-tier and remaining topics. This allocation ensures you are well-prepared for the questions most likely to appear while still covering the breadth of content needed to handle unexpected topics.
Practice with Simulations
The most heavily tested topics tend to appear in both multiple-choice and simulation formats. For top-tier topics especially, practice completing task-based simulations under timed conditions. Revenue recognition and lease calculations are prime candidates for simulation questions that require you to build journal entries, complete financial statement excerpts, or analyze contract terms.
Do Not Ignore Government Accounting
Many candidates underestimate the weight of government and nonprofit accounting on FAR. This content area can account for a quarter of your exam. Candidates who skip or skim government accounting are putting their score at serious risk. Treat it as a core topic, not an afterthought.
By focusing your preparation on the topics the exam emphasizes most, you can study more efficiently and walk into the testing center with confidence that your time was well spent.
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